Multiple choice

G Ltd. purchased land and building from H Ltd. for a book value of Rs. 2,00,000. The consideration was paid by issue of 12% debentures of Rs. 100 each at a discount of 20%. The debentures account is credited with

  1. Rs. 2,60,000

  2. Rs. 2,50,000

  3. Rs. 2,40,000

  4. Rs. 1,60,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Land value Rs. 2,00,000 paid via debentures at 20% discount. Issue price = Rs. 80 per debenture. Number issued = Rs. 2,00,000/Rs. 80 = 2,500. Debentures Account is always credited at face value: 2,500 × Rs. 100 = Rs. 2,50,000.

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